Police officers have yet to receive January’s wages after the finance ministry refused to pay higher allowances, prompting more than 200 officers to seek interest-free loans offered by the police welfare company.

According to local media, the finance ministry rejected salary sheets prepared by the police in line with a new pay structure approved by the parliament last year, which hiked living allowances to MVR4,000 (US$260) a month.

The police have since submitted salary sheets without the pay increment as instructed by the ministry. However, wages have not been deposited as of Thursday afternoon.

Civil servants and staff at other state institutions were meanwhile paid on Wednesday, four days after their normal payday. The delay has fuelled speculation that the government is strapped for cash, but the finance ministry blamed it on the transition to a new payment system.

“I can guarantee you 100 percent that there is no issue with cash flow,” Ahmed Aiman, the ministry’s media official, told the Maldives Independent.

Under the new system, “salaries are transferred directly to government staff from the finance ministry,” he explained. Government offices previously deposited cheques to their accounts at the central bank following approval from the finance ministry.

Amid concerns that the government is short of funds to pay wages, the tax authority meanwhile revealed Wednesday that revenue collected in January reached a record MVR2 billion (US$130 million). The central bank also sold treasury bills worth more than MVR1 billion (US$65 million) last month to raise finances for the government.

Asked why the police’s request for the higher wages was rejected, Aiman said: “I can assure you, if there is a decision to hike salaries, they will get the hiked salaries as per the process.”

According to newspaper Mihaaru, the ministry previously informed the police that discussions are ongoing with the president’s office to resolve the issue.

The police were reportedly told that the ministry is waiting for the National Pay Commission to formulate a new policy for streamlining wages and benefits for state employees.

But a police spokeswoman said funds were included in this year’s budget for the pay hike. The annual budget for the police was increased from MVR1.1 billion (US$71 million) in 2016 to MVR1.3 billion (US$84 million) this year.

Under the new pay structure, all police officers were set to receive MVR4,000 as a living allowance, up from MVR2,500 (US$162) last year.

Police officers of the lowest rank were expecting to see their monthly salary increase from MVR9,250 (US$600) to MVR13,250 (US$860).

Finance Minister Ahmed Munawar told the press late on Thursday that the budget stipulated that the pay hike for the police was to be implemented after the commission’s review of salary discrepancies among state employees.

Police officers will receive their salaries today, he assured.

The police cooperative society meanwhile announced Wednesday that police officers affected by the delay can seek an interest-free loan of up to MVR10,000 (US$650).

According to POLCO, more than 200 officers have since applied for the loan, which must be paid back in two months.

The wage delay also caused anxiety among civil servants. An employee at the youth ministry told the Maldives Independent that senior officials told staff that the changes to the payment process were to blame.

But senior officials at other ministries were reportedly unable to explain reasons for the delay.

“Imagine how it would be when a government worker who has to manage with MVR5,000 every month has to wait four more days,” an employee at the home ministry told the Maldives Independent.